FINANCIAL ADVISOR INSIGHTS: Clients Are Falling Victim To Tax Identity Theft

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

Financial Advisors Say Tax Identity Theft Is On The Rise (The Wall Street Journal)

Advisors say more of their clients are becoming victims of identity theft. Thieves are using social security number to file a bogus tax return and claim a refund. Besides being an administrative nightmare, it is also a blow to client’s financial plans. 

Byron Shinn who has an accounting firm in Brandenton says clients should opt for special identification numbers available from the IRS.

One Should Be Suspect About The Need For A Great Rotation And Its Timing (Barron’s)

Citi’s Tobias Levkovich writes that it is easy to get excited about a trend if that is what people are hoping would happen. And he says this is what is happening with those that are excited about the Great Rotation in which money rotates from bonds to equities. 

“Yet, one has to be suspect of the alleged need for a shift from one asset class to another and its timing. It took two very severe bear markets in the S&P 500 (of more than 50% declines) within a 12-year span to shake individual investors out of the equity market which drove more than $500 billion out of U.S.-oriented equity mutual funds over the past five years, giving these people ample cash to plow into bond funds. 

“…Unfortunately, losing money in bonds may not cause a huge outflow from bond funds which would then pour into stock funds. The tech bubble and the equity market may have peaked in early 2000 but it took almost two years to witness sustained equity fund outflows  as people initially saw the pullbacks as opportunities to step up to “cheaper” names, rather than giving up on the 1980s and 1990s stock price appreciation dream when buying the dip was handsomely rewarded. Thus, believing in a rotation now seems fairly premature.”

The 10 Themes Driving Global Markets Right Now (Goldman Sachs)

Goldman Sachs Noah Weisberger and Aleksandar Timcenko have highlighted the top 10 themes driving global markets now.

Goldman top 10 market themes slide

Flagstar Ruling Shows Banks Are Being Held Accountable For Losses From Financial Crisis (Reuters News & Insight)

A Manhattan court ordered Flagstar Bancorp to pay $90.1 million to bond insurer Assured Guaranty Ltd in a dispute over loans underlying $900 million in mortgage-backed securities (MBS). 

“The closely watched lawsuit has been seen as a test of the ability of bond insurers to hold banks accountable for losses incurred insuring securities at the heart of the financial crisis.”

Hedge Funds Are Now Buying Stocks (Bank of America)

In the past weeks BofA had pointed out that hedge funds had been sellers of stocks, while individual investors were buying them up quickly. Latest data   however shows a role reversal with hedge funds becoming net buyers of stocks, while individual investors are selling and taking profits.

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